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How big is Amazon’s ad business? Hint: Probably a bigger cash cow than AWS

Amazon’s next big thing appears to be its ad business, and it is probably a bigger cash cow than its cloud computing arm AWS

Amazon held its annual Prime Day promotions around the world over the last couple of weeks, and while the big discounts and huge sales numbers grabbed the headlines, the silent winner was Amazon's rapidly growing advertising business, which made a windfall from all the increased ad spend.  According to The Information, advertisers spent nearly three times as much on Prime Day as they did on an average day in the two weeks prior and the ads they bought cost on average 58% more than the going rate during Prime Day 2021. Why does this matter? While Amazon is mostly known for its e-commerce store, the company actually makes most of its dough from its cloud computing arm Amazon Web Services. Or that's what we thought until it earlier this year when it started disclosing advertising revenue separately. Going by the numbers from the company's advertising arm, Amazon's next big thing appears to be its ad business, and it is probably a bigger cash cow than AWS. How big is Amazon's ad business? In February, Amazon for the first time revealed that its revenues from advertising for 2021 were a staggering $31.2 billion. While this was just 7 percent of the company's total revenues, it was higher than YouTube's revenue from advertising for 2021, which stood at $28.8 billion, and it makes Amazon the second largest advertiser in the US after the industry behemoths Google and Facebook. In comparison, AWS made a little over $60 billion, but it is capital intensive, leaving a profit of around $18.5 billion.…

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